Trump pledges to safeguard Chinese telecoms jobs

Logo of China's telecom giant ZTE on an office building in Shanghai. (Johannes EISELE/AFP)

Writing on Twitter, Trump said he had issued instructions for officials to come up with a rescue plan, saying too many jobs were at risk.

"President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast," Trump said.

"Too many jobs in China lost. Commerce Department has been instructed to get it done!"

ZTE announced last week that its major operations had "ceased" following the imposition of a ban by the Trump administration of American sales of critical technology to the company, raising the possibility of its collapse.

ZTE's fibre-optic networks depend on US components and its cheap smartphones sold en masse abroad are powered by US chips and the Android operating system.

Without access to such technology, the company has been forced to partially shut down. "Major operating activities of the company have ceased," ZTE said in a filing on Wednesday.

Beijing has closely followed the developments around ZTE, a company with 80,000 employees headquartered in southern China.

The ban on US sales to the firm arose from its skirting of US export controls by selling to banned countries like North Korea and Iran with employees documenting how to evade American oversight.

Those actions led to a US$1.2 billion fine last year, with the current export ban imposed in April after ZTE allegedly failed to live up to its agreement, lying about the punishment of employees involved in the sanctions skirting.

Trump has insisted that relations between Washington and Beijing have never been better and he has been working closely with Xi in efforts to persuade North Korea to abandon its nuclear programme.

But there have been tenisions on other issues with both countries threatening each other with trade tariffs.

There has been an intense rivalry for supremacy in key technology fields such as artificial intelligence and 5G, the next-generation wireless systems in the works.

Against that background, the Trump administration has barred military and government employees from using smartphones from ZTE and fellow Chinese maker Huawei.

SECURITY THREAT?

The conciliatory move quickly came under fire, with critics pointing out the administration was acting to rescue a firm that US intelligence officials considered an espionage threat.

"Our intelligence agencies have warned that ZTE technology and phones pose a major cyber security threat," said Adam Schiff, who is the senior opposition Democratic Congressman on the House Intelligence Committee.

"You should care more about our national security than Chinese jobs," he wrote on Twitter.

David Frum, a former speech writer for president George W Bush, added that Trump was sending mixed signals after scrapping the Iran nuclear deal and threatening sanctions on European countries that continue to do business with Tehran.

National security advisor "John Bolton threatened sanctions on NATO allies who continue to trade w Iran. ZTE is an Iran sanctions buster on a colossal scale, but China offered more lenient treatment. Why?" Frum tweeted.

'BE COOL'

The US president also earlier this year blocked a deal that would have allowed a Singapore-based firm to acquire US chipmaker Qualcomm, claiming it would enable Huawei to set the pace the global rollout of 5G technology.

The trade troubles threaten a technology sector that is increasingly intertwined with major players in the United States and China.

But Trump said he was optimistic about the future of the countries' trade relations.

"China and the United States are working well together on trade, but past negotiations have been so one sided in favour of China, for so many years, that it is hard for them to make a deal that benefits both countries," he tweeted. "But be cool, it will all work out!"